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Malaysia June-end palm oil stocks seen down 4.9% as exports hit 10-month high

* June-end stocks seen 4.9% lower at 1.94 mln T – survey * Output estimated 8% higher at 1.78 mln T – survey * Exports seen up 20.6% at 1.65 mln T – survey * Malaysian Palm Oil Board data due July 10 By Mei Mei Chu KUALA LUMPUR, July 6 (Reuters) – Malaysia’s palm oil inventories in June likely fell about 5% from May as a recovery in demand from key importers due to the easing of coronavirus-fuelled curbs lifted exports to a 10-month high. June-end stocks in the world’s second-largest producer were seen at 1.94 million tonnes, according to the median estimate of nine planters, traders and analysts polled by Reuters. <MYPOMS-TPO> Output was seen up 8% at 1.78 million tonnes, the highest since October. <MYPOMP-CPOTT> Exports outpaced production as major buyers India, China and the European Union replenished stocks after months-long lockdown, traders said, adding that Malaysia’s decision to exempt palm oil from export tax made it more competitive against rival Indonesian palm oil. “We suspect there could also be some restocking activities by importers due to concerns of a potential second COVID-19 wave,” Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note. Exports in June were expected to have surged 20.6% from the previous month to 1.65 million tonnes, the highest since August. <MYPOME-PO> The pace of exports, however, is expected to slow in July with a surge in coronavirus infections weighing on demand, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics. The market is pricing in potential lower global consumption due to the pandemic and palm prices are likely to only recover in the fourth quarter, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur. Official palm oil data will be published by the Malaysian Palm Oil Board on July 10. The median results from the Reuters survey put Malaysia’s consumption in June at 272,343 tonnes. Breakdown of June estimates (in tonnes): Range Median Production 1,651,328-1,849,000 1,783,434 Exports 1,368,619-1,729,000 1,650,000 Imports 28,000-80,000 40,000 Closing stocks 1,837,000-2,034,480 1,935,571 * Official stocks of 2,034,480 tonnes in May plus the above estimated output and imports yield a total June supply of 3,857,914 tonnes. Based on the median of exports and closing stocks estimate, Malaysia’s domestic consumption in June is estimated to be 272,343 tonnes. (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu)

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